House, White House aim for $32-$35 billion in farm bill cuts

Reuters News

12/3/2012 7:36:39 PM - Reuters News

WASHINGTON (Reuters) - As time runs out to pass a new U.S. Farm Bill in 2012, the White House and Republicans in the House of Representatives hold surprisingly similar goals about how much to cut spending - roughly from $32 billion to $35 billion.

But getting to a final agreement is proving difficult. Each side agrees to significant cuts to farm subsidies and soil conservation, but they have diametrically different views on food stamps, which the White House refuses to cut.

A final figure for cuts may emerge as part of an agreement on government-wide retrenchment to rein in the federal deficit.

House Republican leaders and the White House continued to squabble on Monday over elements for a broad deficit reduction package.

Farm subsidies have been identified as a clear target for cuts. In a series of interviews broadcast over the weekend, Treasury Secretary Timothy Geithner repeatedly cited farm reform as a way to "save a lot of money."

Both sides would eliminate the $5 billion-a-year direct-payment subsidy, also a top target of reformers. And they would reduce funds for conservation.

The near-agreement on the size of cuts is obscured by infighting over funding for food stamps and how broadly to rewrite the farm program, a small-farm activist said on Monday.

"There is some coincidence" in the goal, said Dale Moore of the 6-million-member American Farm Bureau Federation, arising from similar views about agriculture's potential share of cut-backs. But there is sharp disagreement over which programs to cut.

The White House would cut crop subsidies, crop insurance and conservation but not food stamps for the poor. The farm bill approved by the House Agriculture Committee would get half of its $35 billion in savings from food stamps and the rest from crop subsidies and conservation. Some Republicans would cut deeper still into food stamps.

In its proposal, the White House said it would save $7.5 billion on crop insurance over 10 years, $30 billion by ending the direct payment and $2 billion on conservation. It would use some of the savings to pay for disaster-relief programs.

On Monday, House Republican leaders suggested budget cuts patterned on an unsuccessful 2011 budget reform commission on top of automatic spending cuts scheduled to take effect in January. The automatic cuts would trim farm programs by as much as $10 billion. The commission's plan suggested $10 billion in cuts and cited farm subsidy, conservation and export promotion programs as potential targets.

House action on the farm bill stalled during the summer. The Senate passed its bill in mid-June with a lower overall spending cut of $23 billion. It would cut crop subsidy spending by $13 billion over 10 years and reduce the premium subsidy for crop insurance policies purchased by big operators, while paring the food stamp budget by $4 billion.